Modi government bats for special courts to settle disputes related to infra project contracts; details here

By: |
December 21, 2020 12:50 PM

Every week, the high courts have dedicated special days to allow Specific Relief matters' exclusive handling, pertaining to infra project contracts.

Law Ministry, infrastructureThe Law Ministry has asked states to set up special courts.

In order to settle disputes related to infrastructure project contracts under a law that was amended two years ago, the Law Ministry has asked states to set up special courts. According to the ministry, it is very important in improving the ‘Ease of Doing Business’ ranking of both India as well as the states. The ministry, while citing the examples of the high courts of Karnataka, Allahabad, and Madhya Pradesh, has suggested other high courts to allocate a special day to make the designated special courts that are already functioning for dealing with infrastructure project litigation as dedicated courts. Under the Specific Relief (Amendment) Act 2018, Section 20 B provides for designated courts, according to a PTI report. But a designated court is wanted by the Law Ministry to function as a dedicated court on special days.

The secretary (Justice) in the Law Ministry, in a letter to the registrars general of all high courts last week, said that the high courts in the states of Allahabad, Karnataka and Madhya Pradesh have set up Designated Special Courts instead of Dedicated Special Courts under the Specific Relief Act. Every week, the high courts have dedicated special days to allow Specific Relief matters’ exclusive handling, pertaining to infra project contracts. The letter further stated that until Dedicated Special Courts are set up, this arrangement could be considered for adoption in your high court as an alternative measure. It further stated that this could be helpful in the enforceability of contract both from the perspective of cost and perspective of time, thereby stimulating the confidence of investors as well as forming a conducive business climate.

Law Minister Ravi Shankar Prasad had written to all CMs in the month of October, pressing for special courts under the Specific Relief (Amendment) Act of 2018. In the Act for infrastructure project contracts, a new section 20A has been included which provides that the court shall not grant injunction in any suit where it appears to it that granting injunction would lead to delay/hindrance in the completion or continuance of the infra project, he pointed out.

The foreign investors believe that special courts’ presence will ensure enforceability of contracts both from the perspective of cost as well as the perspective of time and provide the much-needed impetus for establishing an investor-friendly ecosystem. Therefore, setting up of special courts will circumvent unnecessary delay/hindrance in the completion or continuance of the infrastructure projects, the Law Minister added.

As per Section 20B of the amended law, to exercise jurisdiction as well as to try a suit under the Specific Relief (Amendment) Act in respect of infra project contracts, the state government, in consultation with the high court’s chief justice, will designate one or more civil courts as special designated courts, within the area’s local limits.

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